Blockchain solutions make financial services fairer, faster

My company, Stronghold, is a financial services provider of native blockchain solutions. When my co-founder and I saw the rise of blockchain platforms, we felt that most were focused heavily on the technology and too far removed from real-world use cases.

Bearing this in mind, we’ve applied blockchain technology to traditional fiat currencies. Instead of working to convince consumers to adopt Bitcoin and other cryptocurrencies, we’re disrupting legacy systems for transmitting value by making the entire process faster and less expensive.

Our core product is Stronghold USD, a digital token that’s backed one-to-one against the US dollar by cash reserves on deposit. Unlike volatile digital tokens that are pegged or algorithmically synched to the dollar, Stronghold USD has a stable value. To help ensure that our institutional-grade regulatory technology integrates with traditional banking systems, we also offer a platform API.

As the first U.S. dollar settlement vehicle to be used on IBM Blockchain World Wire, we’re already creating new efficiencies for organizations and individuals that wish to transmit value. Here are two promising use cases:

Extending banking to underserved populations

In many parts of the world, people who lack wealth or live in isolated areas may not have access to financial services many of us take for granted, such as ATMs and debit cards. As a result, they’re at a distinct disadvantage when it comes to accessing cash, credit and identity management services.

For example, if I wanted to send money from San Francisco to someone in the Philippines, it might take days to complete the transaction, and if their village is far from a large town, they could travel for hours to retrieve their funds. Even then, the amount of money I transmit would be reduced by transaction fees, and if the recipient lacks a bank account, they must assume the risk of carrying cash.

We founded Stronghold so everyone—regardless of where they live—can receive funds and make payments securely without needing to go through correspondent banking or traditional remittance services.

Because blockchain smart contracts combine messaging with the settlement process, anyone who has a smartphone can receive or send money almost instantly. The funds arrive in Stronghold USD, which are easily exchanged with the recipient’s local currency, in this example, Philippine pesos.

The benefits are substantial. Business people who interface directly with suppliers can save time and reduce transaction costs. Plus, the speed of transactions can improve inventory management, and the ease of doing business can accelerate trade to create a more connected economy.

Accelerating cross-border payments

The second use case similarly relies on blockchain’s ability to power transactions at lightning speed. I’m referring to IBM Blockchain World Wire, a multicurrency, cross-border payment rail network for the financial industry. The idea is to create a real-time, more efficient global payment system that supports regulatory compliance, privacy, security and monetary policy.

The barrier to entry is low. World Wire participants can use existing payment front ends to initiate direct payments that close in seconds. Because Stronghold USD is the network’s first US dollar settlement vehicle, it serves as a digital currency bridge between parties conducting cross-border trades.

As a technology partner, I’m very impressed by IBM blockchain’s expertise and commitment. Thanks to IBM’s clout in global finance, we believe World Wire will encourage larger organizations to adopt blockchain technology.

I’m quite optimistic about the potential benefits of this powerful technology—we’re helping financial institutions operate more efficiently and creating products that are empowering individual entrepreneurs, and we’re just getting started.

See Sean Bennett discuss banking transformation for people in remote parts of the world: